Sometimes, when Apple passes a major financial milestone, I’ll have a pang of regret at not having invested all the money I could lay my hands on on Apple back in the mid-1990s.
But that’s far from the worst missed opportunity involving Apple investment. A new article for Fast Company tells the story of seven early investors who sold their AAPL holdings on the day of the company’s IPO in December 1980.
On that day, Apple raised close to $100 million by selling 8 percent of its stock to the public. This was intended to repay short-term debt and accrue working capital. No Apple executive sold their shares on IPO day as a result of contractual obligations. However, the seven private investors made the call to do exactly that.
In doing so, they lost out on a fortune. One share purchased on December 12, 1980 is worth almost $22,000 four decades on. You don’t need to be a math whiz to know that’s 1,000x increase. Fast Company‘s article, written by one of the fast-selling investors, profiles those who sold early. Here’s one sample:
“The largest-selling shareholder was the venture arm of Continental Illinois Bank in Chicago, where a young associate named Paul Wood was assigned the due diligence.
Wood, who is now retired, told me he remembers visiting Jobs and Steve Wozniak at a drab back-corner booth at CES, back in the days when the well-known trade show had a summer edition in Chicago as well as its annual presence in Las Vegas. Jobs was wearing a goofy plaid suit and Wozniak wore bib overalls. Wood was no early fan of the deal, but as he performed the background checks with customers and suppliers a different picture began to emerge.
… Continental Illinois invested $504,000 in August 1978. On IPO day that stake was worth $40 million. The firm sold $5 million of the position at the IPO to get back 10 times its original investment and still held 1.5 million shares of house money.”
It’s a fun article, and a neat piece of Apple history. Ultimately, none of the sellers regret their decision. Many went on to be titans in venture capital. Nonetheless, it shows that everyone’s capable of making some pretty major mistakes when it comes to financial decisions. Still, you live and learn, right?
Source: Fast Company
